Market rises, but caution rules ahead of poll results

ET Bureau|

May 08, 2009, 01.27 AM IST

0Comments

MUMBAI: Reports that most US banks are better capitalised than what they were generally perceived to be fired up sentiment across the globe on Thursday. The results of the government-conducted stress tests of banks will be made public on Thursday.

Back home, key indices rebounded, erasing a major portion of the losses suffered in the previous session. However, trading volumes were on the lower side, as investors chose to tread cautiously ahead of the poll results next week.

The 30-share Sensex moved in a narrow before ending the day at 12,116.94, up 164 points, or 1.4%. The Nifty closed at 3,683.90, up 58 points, or 1.6%. Metal shares were the best performers, taking cue from the firm trend in metal prices on the London Metal Exchange. The BSE Metal Index, surged 8.2% on Thursday after having figured among the worst-performing sectoral indices just a day ago.

���Positive signals from the US over receding unemployment rate and improving health of the financial sector boosted investor sentiment on Thursday. Some short-positions in front-line shares were covered at lower levels, and that fuelled the upmove,��� said a dealer at a broking firm.

Among key gainers in Asia, Japanese shares rose over 4.5%, and stocks in Hong Kong gained 2.28%. Brokers say the near-term trend in India would be driven solely by the outcome of the general elections. There is expected to be some volatility till the new government assumes office, they said. Downside could be limited in case the broad trend in global markets is steady, they said.

���Economic data across the globe have been fairly encouraging, of late. It gives a feeling that global economy would soon be back on track. After witnessing such a rally, a correction is due but the downside is limited,��� said Bharat Shah, head of institutional sales, Ventura Securities. Both foreign portfolio investors and domestic institutional investors were net buyers of equities on Thursday.